Growth And Economic Crises In Turkey: Leaving Behind A Turbulent Past

Executive Summary

This paper first looked into Turkey's growth patterns and economic catching-up since the end of the Second World War and observed that the performance was sub-optimal for two reasons. Until the 1980s Turkey was a closed economy with a strong interventionist economic model and starting with the 1990s Turkey experienced a boom-bust growth model which suffered from chronic macroeconomic instability. The liberalization begun in the 1980s was not accompanied by sound macroeconomic policies or an adequate strengthening of the institutional and regulatory framework, in particular of the banking sector. As a result, the 1990s were marked by volatility which culminated in the 2000/2001 economic crisis.